CAN I GET A DOWN PAYMENT LOAN FOR A HOME?
Mortgage

CAN I GET A DOWN PAYMENT LOAN FOR A HOME?INTRODUCTIONThere is no scarcity of down payment loans options for home buyers; in fact, down payment loans are the rule, not the exception.That explains why almost all conventional loans and special mortgage programs have down payments worked into their terms.What usually differs is the rate of down payment home buyers are expected to pay.Some lenders offer low down payment mortgage programs where one can put down, say, 10% of the property's purchase price. But here's the reality; to qualify for such generous terms, home buyers must have excellent credit, have up to 4 months of a financial reserve for housing expenses and be able to purchase private mortgage insurance.One can expect stringent loan terms for a low down payment, that is, more upfront fees and higher interest rate.The best low down payment loans include the FHA Loan and the VA Loan. If a low down payment loan doesn't appeal to you because of all the hassles, it brings with it, then consider a down payment of 20% of the property's purchase price. WHY A SIZABLE DOWN PAYMENT IS BETTER20% of the property's purchase price is a good number because it's a big enough cushion to protect the lender from nasty surprises. Like every rational, financially literate person, Lenders dread the possibility of losing money and, owing to that mindset; they are likely to offer home buyers willing to make at least 20% competitive loans.This is because such home buyers have demonstrated their fidelity to the relationship between them and the lender. In such an instance, lenders won't be motivated to make a private insurance mortgage a precondition to a loan contract with a home buyer willing to make a sizable down payment In summary, the bigger the down payment, the better one can expect the mortgage terms to be.So prospective home buyers need to start saving up for a sizable down payment.Lots of people are used to living from paycheck to paycheck so much so that saving towards a sizable down payment is considered an impossibility.Nothing can be farther from the truth. If you put your mind to it, it's possible to save up the sizable down payment in a reasonable time. HOW TO SAVE FOR THE DOWN PAYMENTWe're taking the liberty of sharing some actionable tips on saving for the down payment with you.1 Don't cash your tax refund or bonus checks, deposit the money in your savings account.2. Instead of splurging on that planned vacation, channel the money into your savings account.3. You can also tap into your retirement fund but don't travel that path without the guidance of your accountant since you can't afford to run foul of the law.4. Take a second or part-time job for a short period so that you can have more money to stash away in your savings account.5. You can also ask family members and friends for help with your down payment. It's not much of a big deal.Closing ThoughtsUltimately, you can get a down payment loan but making a sizable down payment gets you a loan with better terms.

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